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council director kevin hassett described discuss policy the u.s., an event hosted by axios sea talks with the ongoing government shutdown global economic trends in the u.s./china trade relationship. ♪ good morning. [applause] hi everyone. thank you for being here. a quick upload if you don't already i have a daily e-mail newsletter with courtney brown was every day at noon called macro from gluck global economic markets and all that stuff it ties into her topics today. sites have a final guest with the federal workforce, trade policy, the economy will white house national economic council director kevin hassett. ♪ [applause] >> alright let's dive right in. th' government shut down, is a topic of the day. when wee sang for the white houe point of view? and are their offerings ahead for ending thiss thing? >> yes, first of all the economic is real.

it is a couple weeks in. the cea estimated it would cost eight tenths of a% of gdp a week for a shut down by the way to think about the t economic costs is affluent to export something in the commerce department has given exportar license. andd so the export license is being held up in some cases. so the costs are real. the president and republicans in mitt they just kept the government open. peopleop forget is called the schumer shutdown there were 13c are that were cleaned and imprisoned by and was in office but what people forget republicans played along i each time they had to have 80 votes on average for those. and so the traditional morality it is your job to be a moderating influence even

moderate senators are not fulfilling that duty. that is why i was at an event yesterday at the white house there is number of senators there are just asking people around the edges why is that the democrats are holding the moderate democrats are holding lots of friends. >> have been in town on both sides of the aislee i have high regard for. i heard two or three different times or people. these are republicans telling me so i do not know physically democrats are thinking and i wouldno like to know you think about this. there's no purchase coming on the 18th. the moderate democrats are worried that if they open the government before them they will run into all sorts of political risks of being primary and so on.g i don't know if it is true but if it is true, that means in the 19th we can get this is we've all should have. >> ucs example the congressman mentioned november when the affordable care act.

the insurance marketplace is open is that a hard deadline? are there any clear deadlines coming up? wasli it think the press has a strong position they need to open up the government. outgrew to open it up as we have every day to pass the bill to do so. and then let's go back to the normal order and start negotiating things along the way. but to negotiate things under duress with the government shut down is something that's not acceptable to the president at all but he's not going to budget. i can say i've been in the white house we've also known each other a long time, since 2017 i was on the economic advisers and i came back. and this is the third time the democrats have shut down the congress while president trump is been there. it is almost like there is a political strategy equivalent to trying to freeze the placekicker or something. president trump is knock so many balls out of the parking has had

so many winds are trying to slow the momentum by shutting down the government. so hope that is not true. >> we have heard some republican show openness to extending at least some of the obamacare health insurance subsidies that are the crux of this debate. what is president trump open to negotiating on? works and then president trump is open to negotiating once the government is open. i think that is his position. >> artless talk about the economy there were seeing robust gdp growth. a lot of that is each a.i. in data center. job growth looks a little bit weaker. you worry is not really benefiting american workers? >> it is as? thing that is a puzzle. we have really high productivity growth we have gdp growth in the three -- 4% range. and normally when that happens you see strong jobu growth. one of these things it's a reason why it is over the last few years there are two ways we

estimate jobs there is a household survey we call a revamp and say hey do you have a job? i and then there is a payroll survey we called the firm and say how many people did you hire cosmic the gap between the household survey and the payroll survey was about a couple million people over the last couple of years and then we got a big revision or the payroll survey numbers went down. turns out the household survey is right for the reason i mention that is the last number we had the payroll survey number was weak the household survey numbers 288,000. and since everything on the payroll survey revised for the household survey it could be when you charge you think the survey is the right answer. one benefit of doing that at this moment is that of all the strong data except the jobs data. if you believe the household survey is correct everything makes a lot more sense so that is what i'm leaning towards. >> you think immigration policy

is affecting labor supply and that's part of the store and payroll? >> is a big department decline that has been more than offset by an increase of workers. >> we are hearing more and more out there that even if you do believe a.i. has a huge transformative potentially could be in a situation of this investment bubble. there are risks of that popping like 2001. are you worried about that question held the trump administration? >> we have a lot of people that have been to the ups and downs of allro sorts of things. i was in the white house when they had minus 32% quarter because of covid. think the fact the president has assembled a seasoned team of competent people like secretary bessent, secretary let nick means of thingsre start to inevitably in every economy there's a moment or people at the very least nervous and things are challenging. i think we have a team the president has assembled that will be up to that challenge apartments with respect to the

a.i. i think there is a horse race going on right now. where everybody thanks are going to reach the point where they are the one and they capture the whole market. i think that horse race has been super productive. you see how quickly the tools are improving. there are a number of academic studies that are showing the a.i. improvement is spreading across industries really strong! isstrong! productivity rate is so high. my belief is you do not have to think about something popping we do not have to think it's a high probability because of productivity gains are so high. that means each one of the a that a.i. the people are using s providing a lot of value add. a few of the third best a.i. they can still be run your shoe store that is a calamity that mights occur if someone were to

all the sudden jump to the top without something to worry about. you can put it this way. on that computer came out have my old friend bob gordon sites of europe at the statistics the thing about a.i. it's in the statistics already. there's a really famous economist and federal reserve who is with his colleague dan suckle once with history of productivity booms in the u.s. they found the productivity booms were never observed by time.makers in real were only evident among benchmark revisions because productivity is so hard for data people to estimate. and so think about with a.i. as a productivity boom we are already measuring can imagine how good it will be with the benchmark revision? >> was connected monetary policy mention federal reserve preset interest rate should be cut that was like they'll probably do a couple more times this year. >> heard that yesterday.

>> inflation is still elevated above the target should then be focused on elevation rather than tries to simulate the job market? exactly were the measure is pce core services. i think you should get all of the numbers i actually gdp deep later that is about too inflation has been cut in half since gender is the trajectory. if you have like an understanding of how economies with in the midst of a huge positive splash of o shock, he remember what happens to be shipped the supply curve out you can down the demand curve and prices go down it's a deflationary thing. there was a precedentnd for thii work the federal reserve in the '90s with alanla greenspan.

when the computer revolution was starting to happen. equity markets are celebrating for the unemployment rate was really, reallyre low. my friend bob gordon was saying the productivity is not in the data. until the phillips team were advising greenspan with low unemployment to stay ahead of inflation they need to lift interest rates quite b a bit because the interest rate was so low but greenspan decided if you'regetting a's positive suppy shock you can let low unemployment state low without having to lift rates he gave us three or four really great boom years because he had that sound judgment that that has an opportunity like that right now. >> were supposed it can't get into the next treasury effect secretary bessent has beenth interviewing you for the job. what can you tell us about the

selection process what's president trump looking for? >> president trump was to have a thorough process. he trusts secretary bessent as he should who's been in the markets for good long time to think through what the next best path for monetary policy. there are a lot of candidates secretary bessent has written with the next phase of monetary policy should look like secretary is very critical house howit operated over the last ye. suggesting deeper reforms are needed how much of that do you agree with is this an institution that needs major overhaul? >> it that these be more transparent. we need to note not just dots but why they think what they think. when they make a mistake as they do with inflation they should have economist explained to us what they got wrong and how they

are changing their model so maybe next time it doesn't happen. i think being the wizard of oz behind the curtain used to work you rememberhe day the fed did not say with the policy was you had to learn from watching marcus i think the transparency has moved in the right direction. but it's good it got a good long ways to go pick. >> governor my rent has been arguing the mutual rate of interest is significantly lower than his colleagues believes that's a reason to cut the rates a lot right now. you agree that assessment? >> i have high regard for steve and i respect his argument but i'm not going to into specific rates right now. >> got you. i've seen passing back and forth in the last several days give us an update are we seeing a re- escalation of the trade were you see dormant for a while or what comes next? >> it president xi president trump have a strong relationship.

and to be honest we were pretty surprisedd when all of a sudden out of the blue nay ramped up pressure with this rare earth thing. it sounds like a minor thing but it could be a big disruption to the economy if they really went ahead. might judgment is the imports from china to the u.s. have gone down a lot. but china's economy which is teetering on theh edge of recession has been able to withstand the pressure from our trade policy by selling a lot of stuff to europe. i think they recognize since there funding the ukraine or there is a chance that europe is baby going to start to have a parallel policy to us. in other is chinese exports will be walled off from the developed world. they don't know how to think about that.t i know how they should think about this to rejoin thehe law-abiding nations, be respectful of their trading

partners and beat trustworthyof partners. and not hold people hostage i think the chinese rare earth is very so much with the democrats are doing in the senate with the big governmentn shutdown for. >> is an update on the other side of that relationship. soybean and other agricultural. >> cooksey spent an enormous amount of time setting what we should do that's best for farmers are still working and not getting paid or working very hard on a plan. we expect when the government opens very soon after suet president trump's plan is. it's reallys quite clever and generous. >> it finally usurped in a high level in the previous trump term. not this time one of the biggest differences in how this administration is working? >> i did not expect they would be back brace a joke to my

friends i was trump season one. preseason jew up or be the christmas special or something. we look at the team we've built. we built a team of people who are a mix of new talented people and older people who her for the last administration like me and stephen miller that sort of understand a little bit about how to make the white house function well. incredibly astute leadership from susie wiles. with a few exceptions like really, really strong collegiality. we were talking behind a stage it was not meant to be a criticism of this great organization i can run the first trump administration a lot of times i found out what was going on from ex- io's. even though i was in the white house. that was because everyone who ever had a disagree with anyone else called every journalist in town and said that other guy is

totally a jerk or something and it will be a great story. but this time this white house is extremely disciplined and what we have disagreements they say request for the record meant to wager internal battles through us. [laughter] were happy to talk. i will tail, different tone re- thank you so much kevin it's great to have you here. >> thanks. ♪ c-span's "washington journal" our life form inviting you to discuss latest issues in government, politics and public policy. from washington and across the country. coming up thursday morning we will talk about day 16 of the government shutdown. first of pennsylvania democratic congresswoman chrissy houlihan on its impact on dissent and national security. then with nebraska republican congressman mike flood on the gop strategy done with the shutdown. and writers corresponded on the shutdown's impact on air travel.

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